CALGARY – The Canadian company whose proposal to build an LNG export terminal in Oregon was derailed by U.S. regulators last year has resubmitted its application for a bigger, more expensive project.
Calgary-based Veresen Inc. (TSX:VSN) said Thursday its Jordan Cove project is now estimated to cost about US$10 billion to build, up from US$7.5 billion under its previous proposal, and would have capacity of 7.8 million tonnes per year, up from six million.
The project includes a liquefied natural gas terminal in Coos Bay, Ore., and a 370-kilometre pipeline that will bring natural gas originating in the U.S. Rockies and British Columbia from a southern Oregon hub to the terminal.
Veresen CEO Don Althoff said the new proposal submitted to the U.S. Federal Energy Regulatory Commission has undergone changes to overcome landowner complaints that led to FERC’s ruling in 2016 that its negative impacts outweighed its public benefits.
FERC also found that demand for the project had not been adequately demonstrated.
“Our significant efforts to optimize the design to minimize its environmental footprint and accommodate landowner requests, as well as the support of our world-class LNG buyers, should result in the receipt of the positive regulatory decisions required to build Jordan Cove,” Althoff said in a statement.
The company said Friday it would not provide further comment.
AltaCorp Capital analyst Dirk Lever said the routing changes should make FERC approval more likely.
“(The previous application denial) really came down to eminent domain. To build the pipeline, you’re … going on people’s property. So they changed the routing so it goes on less people’s property,” he said.
The new Jordan Cove application eliminates a 420-megawatt power plant, makes more than 50 pipeline route adjustments and promises to use trenchless drilling techniques to minimize environmental impacts at water crossings, Veresen said.
Lever said a soon-to-close $9.7-billion friendly takeover of Veresen by Calgary-based rival Pembina Pipeline (TSX:PPL) improves chances the LNG project will be built because the resulting company will be much larger with more financial clout.
He said Jordan Cove would be the first LNG export facility on the U.S. West Coast, where it will have an advantage over existing facilities on the U.S. Gulf Coast because it is closer to key Asian markets.
Veresen said it hopes to make a final investment decision on the project in 2019 and start shipping LNG in 2024 provided that FERC issues a draft environmental impact statement early next year and approves the project by the end of next year.
Canada’s LNG export industry has stumbled recently, with the $28-billion Aurora LNG project cancelled earlier this month and the $36-billion Pacific NorthWest LNG project near Port Edward, B.C., shut down in July, both due to poor market prospects for LNG.
A small project called Woodfibre LNG is the only Canadian West Coast LNG export project approved by its owners.
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